TRANSFORMING AGRICULTURE IN THE EAC

TRANSFORMING AGRICULTURE IN THE EAC from the past 50 years and prospects for the future Key & INTERNATIONAL SYMPOSIUM AND EXHIBITION ON AGRICULTURAL DEVELOPMENT 4th to 8th November 2013, Kampala- Uganda regional solutions to local problems

Introduction Preface Preface, conclusions and recommendations The East Africa Community (EAC) has established institutional set-up that opens opportunities for accelerated economic (including agricultural) development in the Partner States. The most crucial of these is the protocol on the East Africa Common Market (EACM) that became operational in 2010 creating a common market of more than 135 million people and a GDP that was estimated to be more than US $80 billion in 2012. During the period of three years (2011 2013) - all the five EAC Partner States have celebrated 50 years of independence. During this post-independence period, agriculture has remained the most dominant sector in the economies of all the five countries. Therefore, in mid-2011, the Trustees of Kilimo Trust initiated the process for organizing an international symposium with the aim of bringing together key stakeholders, experts and leaders from the EAC to critically assess what worked well; what did not work well and the lessons learned in agricultural development during the past 50 years. This process culminated in the convening of the International Symposium and Exhibition on Agricultural Development in the EAC, held in Kampala, Uganda from 4th to 8th November 2013 - during the build-up period to the 15 th Ordinary Summit Meeting of the EAC Heads of State. This was considered an opportune time for undertaking a critical assessment of progress made in the agriculture sector over the last 50 years. To provide articulated and evidence-based issues and lessons to support the debate, a total of 15 papers were commissioned and prepared by leading experts. Three of these were crosscutting keynote papers and the other 12 were designed to focus on specific themes ranging from agricultural productivity to politics and governance. Ten (10) case studies were also commissioned and prepared by young entrepreneurs for the Youth in Agriculture workshop. More than 350 delegates (with women making 30%) from the EAC and beyond attended at least one of the five well integrated events. The events were: a Youth in Agriculture Workshop; a Technical Symposium; Specialist Seminars; a High Level Executive Roundtable; and an 2 Exhibition. The delegates came from the private sector in agriculture including farmers, leaders of farmer organizations and agribusiness players along agricultural value chains; government ministries and departments; national agricultural research organizations; universities; extension service providers; national and regional providers of key services (such as financing); international and regional development organizations supporting agriculture in the EAC Region; civil society organizations; youth in agriculture; and other practitioners in the agricultural sector. A total of 24 pairs of lessons and recommendations were articulated by the technical symposium, the youth in agriculture workshop and the seminars (see Appendix 1). These were tabled at the High Level Executive Roundtable attended by 63 delegates that included Ministers, Parliamentarians, Permanent Secretaries and CEOs from the private sector. H.E the Vice President of the Republic of Uganda Edward Ssekandi delivering the opening address Prof Joseph Mukiibi delivering the vision for transformation The main conclusion is that the EAC region can and should urgently transform its agriculture from the current situation where the sector is dominated by subsistence farming, to a modern, vibrant and commercial sector. It was noted with concern that most of those employed in agriculture remain poor 50 years after independence despite the fact that the EAC Partner States excelled in several agricultural sub-sectors and/or certain aspects such as crop and animal breeding. from the successes and failures in the region show that the green revolution by-passed the EAC Partner States because of insufficient integration of the 5Is of economic development; namely Inputs such as fertilizers and other agrochemicals; or improved varieties and breeds. Institutions - such as public policies; farmer organizations; legislations; or culture. Infrastructure - such as power; water storage for agriculture; warehouses; or roads. Innovations - such as in mechanization; or application of ICT to farming. Incentives - such as access to profitable markets; or for attracting local investment. At the same time success emanating from such integrated approach has been demonstrated within the EAC itself with respect to the smallholder tea, horticulture, and to some extent maize and dairy subsectors. from agricultural sector development achieved in emerging economies such as Brazil, India, China and South Africa, shows that the integration needs to go beyond the agricultural sector itself to build synergies with other sectors of the economy. This requires policies and strategies that place the development of agriculture and agribusiness at the centre of economic and social development. Therefore, it was emphasized that there was a need to increase the level of learning and scaling-out of successful best practices. These should be from other countries in the world to the EAC; from one EAC country to the others; and/or from one sub-sector to the others. This has been and continues to be inadequate in the region. 3

Strong and visionary leadership (both public and private) coupled with serious implementation of consistent policies and strategies, was identified as another major factor in successful transformation of the agricultural sector. Therefore, there is a need to reduce the frequency of unnecessary changes in strategies, programs and other policy instruments, some current major problem leading to: i) uncertainties and disruptions for farmers and other investors in agriculture sector; and ii) limited continuity in some good initiatives which would have transformed the agriculture sector. One of the causes of the unnecessary changes is the current situation where there are too many development programs which tend to take away from national and regional institutions and citizens - the thinking, planning, implementation, funding and accountability for policy and programs in agriculture, agribusiness and rural development. The roundtable prioritized five recommendations of the symposium and associated events. These five are described below and were submitted to the EAC Sectoral Council for Agriculture and Food Security, for consideration and forwarding of relevant recommendations to the EAC Council of Ministers and the EAC Summit of Heads of State. The envisaged transformation of the agriculture sector requires substantial investment and financing. However, one of the lessons from the past 50 years is that there has been inadequate and often uncoordinated investment in agriculture and agribusiness by both the private and public sector. Therefore, national as well as regional collaborative programs are urgently needed to improve financing and investment in agriculture and agribusiness - but in ways that avoid distorting the financial markets. This is because funds are readily available but the key bottleneck is low absorption capacity within the agriculture sector. Efforts should therefore be directed at building capacities to create a critical mass of farming and agribusiness enterprises that can absorb large and medium-sized funding from national, regional and global financial institutions as well investment and equity funds. A second aspect of focus should be the reduction of the high risk associated with the agriculture sector and thus the high cost of financing. 4 Ms Esther Muiruri of Equity Bank Such focus will include incentives for the private sector to operate comprehensive weather-indexed agricultural insurance at regional scale. In the last 50 years, agriculture (especially farming) has remained backward due to lack or low levels of use of modern inputs such as mechanization and fertilizers. A key lesson is that, modern inputs and technologies are crucial in achieving an enduring transformation of agricultural sector as demonstrated by the successes registered in the EAC, between the 1950s to the 1970s, with respect to traditional cash crops as well as the more recent successes such as in horticulture. Therefore, dedicated efforts are required to effectively utilize the opportunities made possible by the EACM, to build and develop local manufacturing of fertilizers, farm machinery, agroprocessing equipment, and other modern agricultural technologies/inputs. This requires a rapid expansion of regional agricultural trade to create economies of scale in the demand and supply of such technologies/ inputs with in the region. Improved post-harvest management and processing of agricultural (especially food) commodities; to: extend length of stable shelf life, reduce deterioration in quality, enhance food safety, and/or value addition into differentiated products, are very crucial enablers of regional agricultural trade for wealth creation and food security. Therefore, the EAC should mount a regional program to help the private sector to modernize and expand post-harvest handling and agro-industries so that majority of food and other agricultural commodities are processed, within the EAC, into differentiated products as demanded by the final consumer in the national, regional and international markets. The youth is a great asset in the EAC and lessons from the last 50 years show that youth are not being attracted to the sector and small-scale farmer are mostly the over 50 year of age and/or those who have retired from salaried employment limiting vibrancy in the sector. Therefore, the envisaged transformation of the agricultural sector in the region requires well designed and executed strategies to attract and retain the youth in agriculture (especially farming). Therefore, a special regional program on 5

Youth in Agriculture is essential to capitalize on the demographic dividend in the region. A starting point will be a Kilimo Youth Forum of East Africa to facilitate youth peer learning in farming and agribusiness. Programming and policy on investment and financing should adopt affirmative action for the youth in agriculture. Furthermore, to realize more benefits for agriculture from the demographic dividend, the EAC and its Partner States should make substantial investment in developing the youth human capital. While acknowledging the seriousness of the lessons and the recommendations made during the symposium and associated events, the roundtable noted that similar recommendations are being made repeatedly because the speed of implementation of regionally agreed programs and protocols is very slow. One of the main causes identified is the inadequate efforts to mobilize necessary and critical mass of actors down to the grassroots. Therefore, the EAC needs to build into all agreed protocols and regional programs, well funded and implemented process of mobilizing, raising awareness and improving implementation capabilities for the necessary and sufficient actors. It is very encouraging to note that to deal with this problem, at their Summit Meeting held on 30 th November 2013, the EAC Heads of State considered a mechanism for the implementation of outstanding summit decisions and: a) Directed the Secretary General in consultation with the relevant Heads of State to report regularly on the implementation of decisions including non-compliance and decided that the status of implementation remains a standing item on the agenda of the summit. b) Undertook to report on individual partner states implementation of decisions involving their respective countries at every ordinary summit. c) Directed the Secretariat to prepare a comprehensive list on non implementation of all decisions for consideration at the 12th Extraordinary Summit in April 2014. Preface Appendix 1: Key & Mr. Henry Mwololo of Kilimo Trust Dr. Fina Opio -Executive Director ASARECA General from the Opening and Keynote Papers Session Most available statistics and analysis are not robust, continuous and/ or comprehensive enough to support quality planning, effective implementations, and evaluation. Therefore, more often than not, policies, strategies and program have not led to the anticipated results Infrastructure has mainly been developed on the basis of political considerations. Development partners have had inordinate influence in the conceptualization, designing, funding as well as implementation of agricultural development initiatives in the region. This has made the sector a collection of a plethora of interventions that are difficult to coordinate There has been insufficient leadership, commitment and public investment to develop the agricultural sector leading to many agreed strategies and programs (especially at regional level) not being implemented at all and/or being implemented at a slow speed. Farmers have tended to grow food staples and traditional crops even where they are ill-suited, as a result of self-sufficiency approach to food security The green revolution by passed Africa because of insufficient integration of the 5 Is (Incentives, Inputs, Institutions, Infrastructure, and Innovation). Consequently, there are high yield gaps across all the commodities. Radically increase the quality of statistics and analysis to drive efficient policy formulation, planning, implementation, monitoring and evaluation. To facilitate regional integration in the agriculture sector enhance regional collaboration in sector statistics and analysis and also harmonize the approaches and methodologies used. Investment in the development of infrastructure (e.g. power, ICT, rural roads, storage facilities and irrigation systems) should be strategically linked to agriculture and agribusiness development in the region. Therefore, such investment should be driven by agricultural potential and agricultural development objectives. EAC as a block and as individual Partner States should rebuild the local capacity in leading the thinking, planning, implementation, M&E and accountability for policy and programs in agriculture, agribusiness and rural development. The EAC should build into all agreed protocols and regional programs, well funded and implemented process of mobilizing, raising awareness and improving implementation capabilities for the necessary and sufficient actors. EAC Partners States should be more serious about using EA Common Market as an instrument of food security through structured regional food trade that enable the effective utilization of comparative advantages. Accelerate agricultural transformation in the EAC towards commercialization (especially of farming). The key will be integration that goes beyond the agricultural sector itself. This requires policies and strategies that place the development of agricultural value chains at the centre of economic development. 6 7

From Cluster 1: Towards Enhanced Competitiveness in Production, Productivity and Market Access From Cluster 2: Turning Agricultural Knowledge into Business Although institutions have been increased in numbers, the depth of effectiveness which was there for the then traditional cash crops at independence, have not been maintained and/ or scaled-out to the staple food sub-sector. In the past 50 years, there has been inadequate and often uncoordinated investment in agriculture and agribusiness by both the private and public sector. Undertake programs designed to deliberately train modern farmers of the future to make farming a professional business rather than a way of life. To achieve this: Develop and/or strengthen institutional frameworks both public and private for building economies of scale and scope. Expand capacity and skills (in entrepreneurship, business and technical aspects) and professionalism of all actors along the value chain. Retrain the existing agricultural experts, farmers and other actors along the value chain, to arm them with modern knowledge and skills. Improve the access and effective utilization of financing for agriculture and agribusiness for farmers and other enterprises along the value chain. This will require: Coordinated regional-wide actions to reduce the risk associated with agricultural financing Building the capacity of farming and agribusiness enterprises to absorb medium to large scale investment and financing During the last 50 years, very limited progress has been made to upgrade the technologies such that farming and primary processing continue to use very rudimentary equipment and machinery that are not supportive of modern commercial agriculture and agribusiness. The EAC as a region has done very well in expanding agricultural training at all levels in the past 50 years. However, the depth of quality is lagging behind the realities and needs of the 21st Century. Most of the training is being implemented using outdated curricula with limited facilities especially for practical and business training. This is not in synchrony with the desire to have a commercialized agriculture sector in the EAC that is responsive to, and competitive in, the local, regional and global markets. Accelerate the availability and utilization of cutting-edge technologies and management practices benchmarked on international best practices to make agricultural enterprises more competitive. This will require the re-building of institutions and strong linkages between agribusiness and commercial farming on one hand, and R&D, training, extension services and markets on the other. Up-grade the quality of agricultural training at all levels, by: Re-building the quality of training at all levels to match international standards. Supporting the development of practical and business skills. Re-designing university level training to impart modern general knowledge on the entire agricultural value chain in the first three years of all bachelor s degrees so as produce trainers, agricultural entrepreneurs, extension providers, policy analysts, managers, and researchers of the future. Building the capacity of financial institutions, especially commercial banks. Agriculture (especially farming) has remained backward due to low levels of input use including mechanization and fertilizers, weak linkages between research & development, extension and agribusinesses Make critical inputs and machinery easily available and cost effective through a regional coordinated program to support the private sector to use the EACM to build thriving businesses for the local manufacturing of modern agricultural technologies/inputs. Limited financing in agriculture due to its perceived and real risks in the sector De-risking agriculture financing through smart subsidies (subsidized credits), guarantees, developing appropriate insurance policy products, building human capacity of financial institutions with respect to agricultural financing. So far the EACM is not serving accelerated agricultural development due to limited cross border trade especially for food staples Expand structured regional agricultural trade (from the current 13% of production to over 50%) so as to effectively utilize the EACM as an instrument for making the agriculture sector more effective in wealth creation and food security (as already agreed in the EAC Food Security Action Plan. Disconnect between research, extension and experience of the farmers. Invest in building strong linkages between the scientific and applied research, extension, commercial agri-businesses and farmers. 8 9

From Cluster 3: Turning EAC s Comparative Advantage in Human Capital and Natural Resources to a Competitive Advantage in Global Markets Weak institutional structures, governance systems and a lack of strong leadership have contributed to delayed agricultural transformation in the EAC A history of political and social conflicts as well as policy inconsistencies, have led to poor continuity in most of the initiatives which would have revolutionized the agricultural sector. The momentous change in the demographics over last 50 years as well as the projections for the future has been grossly under emphasized in agricultural development planning. There have been examples of successful agricultural transformations over the last 50 years (e.g. Brazil, India, and selected African and Asian countries). Enhance the capacity of communities to fully understand their rights so as to demand accountable leadership and more effective governance systems at all levels Political and policy intent for agricultural transformation should be consistent, based on evidence and stakeholder consultations. This will demand that the EAC and other partner States: Achieve timely ratification followed by own funding of the implementation of regional protocols, treaties and CAADP Compacts. Increase capacity, skills and efficiency in evidence-based policy formulation and approval. Enhance monitoring and evaluation of food and agricultural policies in the EAC. Demographic changes such as the youth majority and urbanizations - offer major reasons and opportunities for the transformation of the agricultural sector. Therefore, the demographics of the region should be well understood and integrated positively to policies, strategies and programs for the transformation of the sector. Learn, understand and adapt successful models of transformation from comparable developing countries. Women have played a fundamental role in the past in agriculture and the youth will play a significant role in the future. However, both are given very limited attention in development interventions. Weak institutional implementation capacity, lack of institutional coherence and limited independence in execution of mandates. During the last 50 years, very limited attention has been paid to strategic utilization of natural resources including the newly discovered Oil & Gas for the development of agriculture. Enhance following: ü Incentives to enhance the role of youth and women in agriculture. ü Optimal use of available land and other natural resources. ü Right balance of supporting women, men and youth in all agricultural development programs. Enhance sector institutional capacity by developing specialist skills, improving performance measurement and reporting, and learn from successful institutions in the region and beyond. Use the proceeds from the oil and gas sector in investment for the development of economic sectors such as agriculture, rather than consumptive expenditure that distort the economy. From the YiA Workshop: Enhancing Business & Employment for the Youth in Agriculture Large percentage of youth use social media which has not been tapped to attract them into agriculture and agribusiness. Lack of agricultural forum for the youth to discuss issues of common interest. Inadequate services that attract youth to the rural where agriculture is practiced. Minimal involvement of youth in decision making. Mainstream ICT, and social and mass media to create the coolness required to pull the youth into agriculture. Establish a Kilimo Youth Forum of East Africa to champion regional issues for youth in Agriculture and also showcase more success stories on a more regular basis. Priority action area is to establish Youth Agriculture Clubs examples are the 4K (Kenya) and 4H (USA) More rural directed developments that would make the agro-based rural setting more attractive to the youth Increase the involvement of youth in the running of affairs targeting them with respect to the agriculture sector. 10 11

Council of Ministers of the EAC CEOs of Private Companies Ministers and Cabinet Secretaries Preface Map Of Uptake Pathway NOTE PAD Action Briefs submitted to summit meeting of EAC Heads of State in subsequent sitting EAC Heads of State Action briefs submitted for buy in Action Points Ratified by Concil of Ministers of the EAC in subsequent sitting Action points submitted to the council of ministers through the EAC sectoral council for ratification 08 November, 2013 High Level Executive Round Table Meeting submitted for adoption Parallel Sessions 05-07 November, 2013 Technical Symposium Plenary Sessions 04 November, 2013 YOUTH in AGRICULTURE (YiA) WORKSHOP 12

NOTE PAD

Kilimo Trust (KT) is a regional, independent not for profit organization working on agriculture for development across the East Africa Community (EAC) Region and the Republic of South Sudan. Its mission is to catalyze the growth and competitiveness of strategic agricultural sectors for the benefit of a large number of people in East Africa. It provides leadership and hands-on implementation of programs and projects on behalf of, or in partnership with, governments, international and regional organizations, and the private sector. KT s core business is to increase structured regional trade in food commodities and their products. This is driven by the realization that using comparative advantages to effectively respond to market opportunities for income generation is a more sustainable route to food and nutrition security, because of its positive influence on investment in modern and better technologies and practices for food production. KT s delivers two streams of services and products: a) Knowledge Products for Development of Strategies, Programs and Capacities: The general thrust is to undertake comprehensive diagnostics and analysis to develop a regional knowledge-base on strategic food commodities and identify priority areas of focus in developing regional markets. Work has already been completed with respect to scoping of 39 key commodities; and detailed sector analysis for Rice and Beans. Preliminary market diagnostics have also been completed for nine (9) other commodities. The knowledge base is being used to design regional strategies and programs. For example, KT supported the development of the Common Strategy for Food Security, and the approval of the EAC Food Security Action Plan. KT is now working with FAO to support the development of the East Africa Agro-industries and Agri-enterprises Development Program (E3ADP). b) Implementation and Management of Sector Development Programs: Results of the work on sector analysis are being used to design a portfolio of Regional Agricultural Markets Development Programmes for the EAC + South Sudan. Starting with Beans, Rice and Cassava, KT is implemeting the following programs: Development of Inclusive Markets in Agriculture and Trade (DIMAT) for beans, cassava and rice produced by smallholders in Uganda. Beans Enterprises and Structured Trade in the EAC (BEST-EAC) to develop consumer driven markets and structured regional trade of beans and bean-food- products in the EAC. Regional East African Community Trade in Staples (REACTS) with an aim to increase competitiveness of commercial enterprises of smallholders working of the staple foods sub-sector in the EAC while enhancing quality and affordability of food products, especially for the low income consumers. The program will work with the private sector (small, medium and large) to test, validate and mainstream models for moving beyond enhancing productivity to focus more on competitiveness of the smallholder producers in the market place. Tel: Email: Web: +256 312 264 980/1/2 admin@kilimotrust.org www.kilimotrust.org